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| PRESIDENT CLINTON CELEBRATES ENACTMENT OF INTERNATIONAL DEBT RELIEF |
| FUNDING, URGES DIVERSE COALITION OF SUPPORTERS |
| TO CONTINUE FIGHT AGAINST GLOBAL POVERTY |
| November 6, 2000 |
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Today, President Clinton will celebrate enactment and full funding of his
FY 2001 budget request for international debt relief. Following the
signing of the FY 2001 Foreign Operations Appropriations bill, which
includes the debt relief funding, the President will be joined in a White
House East Room ceremony by a broad and bipartisan coalition of religious
leaders, non-governmental organizations, Members of Congress, labor unions,
and advocates for Africa. The President will cite unsustainable foreign
debt as a key factor contributing to global poverty -- which leaves nearly
half the human race, an estimated 2.8 billion people, to survive on less
than $2 a day -- and will again urge an unrelenting battle to help
developing nations overcome this poverty. The bill the President will sign
into law today includes $435 million for U.S. participation in the Cologne
Debt Initiative as well as full authorization for the International
Monetary Fund to tap investment proceeds from limited off-market gold sales
to finance its participation in the Initiative. Under the initiative,
known as the enhanced HIPC initiative, savings from debt relief will be
directed to education, health care, AIDS prevention, and other critical
needs in qualifying countries. The bill which the President will sign into
law today includes $435 million for U.S. participation in the Cologne Debt
Initiative as well as full authorization for the International Monetary
Fund to tap investment proceeds from limited off-market gold sales to
finance its participation in the Initiative. Under the initiative, known
as the enhanced HIPC initiative, savings from debt relief would be directed
to education, health care, AIDS prevention, and other critical needs in
qualifying countries.
ENACTMENT OF THE PRESIDENT?S INTERNATIONAL DEBT RELIEF BUDGET REQUEST
ENSURES IMPLEMENTATION OF THE COLOGNE DEBT RELIEF INITIATIVE. Last fall,
Congress approved only $110 million of the $920 million the President
requested over four years to cover the cost of U.S. participation in the
expanded international debt relief efforts launched at the Cologne G-7/G-8
Summit. Congress provided no funds for the HIPC Trust Fund, a multilateral
facility to supplement the resources of regional development banks, such as
the Inter-American Development Bank, which are unable to finance loan
write-downs on their own. It also failed to provide full authorization for
the IMF?s participation in the initiative. Faced with the prospect that
the landmark U.S.-led global poverty reduction initiative would falter, the
President this year requested $435 million in appropriations, including
$360 million for the HIPC Trust Fund, and the remaining needed
authorization for the use of IMF gold sale investment proceeds to finance
debt relief. This action ensures that countries like Bolivia and Honduras,
which had seen progress on their debt relief stalled pending U.S. funding,
will see their plans implemented.
THE PRESIDENT WILL THANK RELIGIOUS, NGO, DEVELOPMENT, CONGRESSIONAL, AND
OTHER LEADERS WHO SUPPORTED DEBT RELIEF AND URGE THEM TO WORK TOGETHER TO
BUILD AMERICAN SUPPORT FOR GLOBAL POVERTY REDUCTION. The President will
recognize the extraordinary work of the Jubilee 2000 Coalition, made up
primarily of religious groups, but also others long active in fighting
poverty, and will thank the bipartisan coalition of leaders including
Members of Congress, labor and business groups, and other leaders that
helped pass debt relief this year. The President will argue that an
intensified battle against global poverty -- which leaves 1.2 billion
people to live on less than a dollar a day -- is in America?s interest on
moral, economic, and security grounds, and will urge the unusually diverse
coalition to continue its efforts. He will cite Administration initiatives
to expand funding for infectious diseases, including a near doubling of
assistance for combating HIV/AIDS in the FY 2001 Foreign Operations
Appropriations bill he will sign before the ceremony, as well as to
increase support for expanded access to basic education and information
technology in developing countries.
THE U.S. HAS BEEN AN INTERNATIONAL LEADER ON DEBT RELIEF FOR DEVELOPING
NATIONS. In March 1999, President Clinton presented a plan to a
U.S.-Africa Summit in Washington that became the basis for the G-7
agreement in Cologne, Germany (known as the Cologne Debt Initiative) to
triple the amount of debt relief available for poor countries, reducing
their debt by about 70% or $90 billion -- from an estimated $127 billion to
as low as $37 billion -- in return for firm commitments to channel the
benefits into improving the lives of all their people. Last September,
building on that agreement, the President announced that the U.S. would
unilaterally exceed the terms of the G-7 initiative and entirely cancel the
$5.7 billion in U.S. government debt owed by qualifying countries. The
Cologne Debt Initiative called for only 90% debt reduction for certain
types of bilateral debt. In addition, the U.S. has supported efforts to
expedite the process of qualifying countries for the expanded Heavily
Indebted Poor Country (HIPC) program.
INTERNATIONAL DEBT RELIEF WILL HELP FREE UP SCARCE RESOURCES FOR HEALTH AND
EDUCATION IN DEVELOPING NATIONS. For the average HIPC country, the share
of scarce government revenue devoted to debt service (primarily interest
payments) could fall by 25% to 50%. For example, Mozambique?s debt is
expected to be reduced by some $3.5 billion, which could cut in half the
share of government revenues allocated to external debt service, and free
about $96 million in budgetary resources each year. These savings are
equivalent to double the 1998 health budget in a country where children are
more than 3 times as likely to die before the age of five as they are to go
to secondary school. In Uganda, enhanced debt reduction could allow health
and education spending to increase by 50% from 1998 to 2001 and rural
development expenditures to more than double.
AS MANY AS 33 HEAVILY INDEBTED POOR COUNTRIES REPRESENTING 430 MILLION
PEOPLE COULD ULTIMATELY BE AFFECTED. The 33 countries that could
potentially benefit from debt relief are Honduras, Mauritania, Nicaragua,
Tanzania, Benin, Bolivia, Burkina Faso, Cote d?Ivoire, Guyana, Mali,
Mozambique, Senegal, Uganda, Cameroon, Chad, Republic of Congo, Ethiopia,
Ghana, Guinea, Guinea-Bissau, Laos, Madagascar, Malawi, Niger, Rwanda,
Sierra Leone, Togo, Zambia, Central African Republic, Burundi, Congo DR,
Sao Tome, and The Gambia.
ELEVEN COUNTRIES HAVE QUALIFIED FOR EXPANDED DEBT RELIEF SO FAR. These are
Benin, Bolivia, Burkina Faso, Honduras, Mali, Mauritania, Mozambique,
Senegal, Tanzania, Cameroon, and Uganda. Another nine could qualify by the
end of 2000 (Chad, The Gambia, Guinea, Guyana, Guinea-Bissau, Malawi,
Nicaragua, Rwanda, and Zambia). That is the goal set by the G-8 with U.S.
support at the July Okinawa Summit. The majority of the remaining HIPCs
have not made progress toward qualifying because of their engagement in
conflict. Others have been slow to develop their poverty reduction
strategies, which are necessary to ensure that the savings from debt relief
go toward productive investments to reduce poverty, like basic education
and health care, rather than military spending. Still others have not
requested the extra debt relief.
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